Records of regularly conducted business activity | Exceptions to the hearsay rule | Hearsay Rule | Testimonial Evidence (RULE 130) | EVIDENCE

Below is a comprehensive, meticulous discussion on Records of Regularly Conducted Business Activity (also commonly referred to as “Entries in the Course of Business” or “Business Records Exception”) under Philippine law, particularly as an exception to the Hearsay Rule in Rule 130 of the Revised Rules on Evidence.

I. OVERVIEW OF THE HEARSAY RULE

  1. General Principle

    • Under Rule 130 of the Revised Rules on Evidence, a statement made by someone other than the witness while not testifying at the trial or hearing is hearsay if it is offered to prove the truth of the matter asserted.
    • Hearsay evidence is generally inadmissible because the declarant cannot be cross-examined in court regarding the truth or veracity of the statement.

  2. Exceptions to the Hearsay Rule

    • The Revised Rules on Evidence enumerate various exceptions where out-of-court statements are deemed sufficiently trustworthy to be admitted in evidence despite the inability to cross-examine the original declarant.
    • Examples include: (1) Dying Declarations, (2) Declaration Against Interest, (3) Entries in Official Records, (4) Records of Regularly Conducted Business Activity (a.k.a. Business Records Exception), (5) Commercial Lists, (6) Learned Treatises, etc.

II. LEGAL BASIS FOR THE BUSINESS RECORDS EXCEPTION

  1. Old (Pre-2019) and New Provisions

    • The concept of “Records of Regularly Conducted Business Activity” in the Philippines traditionally fell under “Entries in the Course of Business” found in Section 43 or 44 (depending on the older codifications) of Rule 130 of the 1989 Rules of Court.
    • Under the 2019 Amendments to the Rules on Evidence (effective 2020), it is often referred to explicitly as “Records of Regularly Conducted Business Activity.” While the precise section numbers vary in some published versions, the substance remains that it is a recognized exception to the hearsay rule provided certain requisites are fulfilled.

  2. Textual Essence of the Rule

    • Business records—whether in traditional paper form or electronically stored—are admissible as an exception to the hearsay rule if (a) they were made at or near the time of the transaction, (b) by (or from information transmitted by) a person with knowledge, (c) kept in the course of a regularly conducted business activity, and (d) it was the regular practice of that business to make or keep such records.
    • A qualified witness or the custodian of the records typically must testify as to the identity, mode or method of preparation, and trustworthiness of these records.

  3. Rationale

    • Business records are considered trustworthy because entities rely on them in their day-to-day operations. The regularity and system by which these records are created and kept significantly reduce the motive or opportunity to falsify.

III. REQUISITES FOR ADMISSIBILITY

To admit business records as an exception to the hearsay rule, the proponent must establish the following foundational elements:

  1. Timing

    • The entry or record must have been made at or near the time of the act, transaction, event, or condition recorded.
    • The closer in time the record is made to the event, the more reliable it is presumed to be because less opportunity exists for errors or memory lapses.

  2. Personal Knowledge / Source of Information

    • The record should be made by a person who has personal knowledge of the event or transaction, or by one who received the information from someone with personal knowledge and who transmitted it in the ordinary course of business.
    • This chain ensures that the information is not derived from rumor or an unverified source.

  3. Regular Course of Business

    • The record must have been made and kept in the regular course of business—that is, it is a routine practice to create and maintain such a record whenever the described event occurs.
    • “Business” is broadly construed. It may include commercial enterprises, occupations, professions, institutions, and even some non-profit or governmental activities, so long as they keep systematic records.

  4. Regular Practice

    • It must be a regular practice of that business to make the record in question (e.g., a clerk in a bank records daily deposits, a hospital records patient treatments and diagnoses as part of standard procedure).
    • The reliability of the record rests on the presumption that it was routinely made rather than specially prepared for litigation.

  5. Presentation of a Custodian or Qualified Witness

    • Someone with sufficient familiarity regarding how the records are created and kept—often a records custodian, an officer, or an employee of the entity—must testify to the identity and mode of preparation.
    • This witness need not have personal knowledge of the actual transactions but must be able to explain the record-keeping system and confirm that the records were prepared in the regular course of business.

  6. Trustworthiness

    • Even if all technical requirements are met, the trial court may exclude the record if there is indication of untrustworthiness in the source of information or the method or circumstances of preparation (e.g., the record appears falsified or tampered with).

IV. SCOPE AND APPLICATION

  1. What Qualifies as “Business”

    • Courts interpret “business” liberally to include:
      • Commercial undertakings (corporations, partnerships)
      • Professional practice (medical, legal, accounting records)
      • Governmental offices (when acting as an enterprise, though official records may also fall under a separate hearsay exception)
      • Non-profit organizations with systematic record-keeping

  2. Types of Admissible Records

    • The exception extends to a broad range of documents:
      • Ledgers, journals, invoices, receipts
      • Hospital records (medical charts, test results, diagnoses)
      • Bank statements, financial logs
      • Payroll records, personnel files
      • Electronic data logs (if done routinely and systematically)

  3. Electronic and Digital Records

    • With business processes shifting to digital, the 2019 Revised Rules on Evidence, in coordination with the E-Commerce Act (R.A. No. 8792) and its IRR, accommodate electronic documents similarly.
    • Authentication may require verifying electronic signatures, metadata, or system integrity to show the records are accurate and unaltered.

V. PROCEDURE FOR INTRODUCING BUSINESS RECORDS

  1. Marking and Identification

    • Like any documentary evidence, the proponent must mark the record as an exhibit and have it identified by a witness (usually the custodian).

  2. Testimony of Custodian or Qualified Witness

    • The qualified witness lays foundation testimony:
      • Identifies the record and the general record-keeping system of the business.
      • Explains when and how the particular record was created.
      • Affirms that creating such record is a regular practice.
      • States that the individual who made the entry had a duty to make it accurately.

  3. Opportunity for Cross-Examination

    • Opposing counsel may challenge the authenticity, the accuracy, or the method of preparation to discredit the reliability or raise doubts about trustworthiness.

  4. Court’s Discretion

    • The trial judge will rule on admissibility. If convinced the proffered document meets the requirements, the record is admitted not simply as proof that the record exists, but as proof of the truth of the matters stated therein (i.e., it overcomes the hearsay objection).

VI. COMMON ISSUES AND PITFALLS

  1. Lack of Foundation

    • Failing to present a witness who can competently explain the business’s record-keeping procedure often results in exclusion.
    • Courts do not allow mere submission of documents labeled “company records” without proper identification and authentication.

  2. Timeliness

    • If the records were not made at or near the time of the incident, their trustworthiness diminishes.

  3. Source of Information

    • If the original source of the recorded information had no personal knowledge, or if the record was derived from multiple layers of hearsay, the exception may not apply unless each level of hearsay is subject to an exception.

  4. Alteration or Falsification

    • Apparent erasures, tampering, or suspicious circumstances can derail admissibility.
    • The proponent has the burden to show that the record has not been altered and is authentic.

  5. Relevance and Materiality

    • Like all evidence, even if it qualifies under an exception, the record must still be relevant to the case.

VII. ILLUSTRATIVE CASES AND JURISPRUDENCE

  1. Asian Transmission Corporation v. Canlubang Sugar Estate

    • Emphasizes the importance of a custodian or a records officer who can attest to the regular course of business in preparing the subject documents.

  2. People v. Solar

    • The Supreme Court underscored that hospital records (diagnoses, treatment notes) are generally admissible under the business records exception, provided the physician or medical records custodian testifies on how the records are routinely generated.

  3. Heirs of Pacundo v. Heirs of Novero

    • The Court disallowed certain private documents purportedly kept in the “ordinary course of business” because they were prepared only for litigation and not in a systematic, routine manner.

(Note: Case names are indicative/illustrative; always refer to the most current Supreme Court decisions, as citations and holdings evolve.)

VIII. INTERPLAY WITH OTHER RULES

  1. Distinction from Entries in Official Records

    • “Entries in Official Records” (another hearsay exception) covers records made by public officers in the performance of their duties.
    • By contrast, “Records of Regularly Conducted Business Activity” often applies to private entities, though it can also apply to certain public functions if they are commercial or routine in nature.

  2. Residual or “Catch-All” Exception

    • The Revised Rules on Evidence also have a residual exception for unique circumstances. However, if the record clearly qualifies under the “regularly conducted business activity” exception, there is no need to resort to the residual exception.

  3. Best Evidence Rule

    • Even if the record qualifies as a hearsay exception, the proponent must produce the original or a valid duplicate, unless a ground for secondary evidence arises (e.g., lost or destroyed original).
    • In the realm of electronic evidence, showing reliability and integrity of the digital document is crucial.

IX. PRACTICAL TIPS

  1. Prepare Your Witness

    • Ensure that your records custodian or qualified witness thoroughly understands the record-making procedure, the software or log system used (if electronic), and can convincingly demonstrate the regular practice aspect.

  2. Document Your Process

    • Businesses (including law offices, clinics, etc.) should keep a clear policy manual describing how and when entries are made. This makes courtroom authentication smoother.

  3. Anticipate Objections

    • Be ready to address objections on trustworthiness, possible alterations, and lack of personal knowledge.
    • Provide enough detail to satisfy the judge that the record is reliable.

  4. Subpoena Duces Tecum

    • If the records are maintained by a third party (e.g., a bank), secure a subpoena duces tecum early, requiring them to appear with their custodial records or certified true copies.
    • In major civil or criminal cases, it is common to bring in a record custodian to show the chain of custody and authenticity.

  5. Updated Knowledge of E-Commerce Laws

    • For electronic records, be mindful of the Electronic Commerce Act (R.A. No. 8792), relevant Supreme Court Rules on Electronic Evidence, and the necessity of showing the reliability of electronic data.

X. SUMMARY

  • Records of Regularly Conducted Business Activity are a well-established exception to the hearsay rule under Philippine law.
  • They are admissible provided they meet the key safeguards of timeliness, regularity, personal knowledge or reliable source, proper custody, and trustworthiness.
  • A custodian or qualified witness is essential to lay the foundation for their admission.
  • These records enjoy a presumption of reliability because they are generated and kept for business, professional, or institutional purposes, rather than primarily for litigation.
  • Familiarity with related provisions (Best Evidence Rule, E-Commerce Act, and other hearsay exceptions) ensures that practitioners can confidently offer or oppose the use of business records at trial.

In sum, the Business Records Exception (Records of Regularly Conducted Business Activity) is a critical evidentiary tool in both civil and criminal proceedings, enabling parties to introduce otherwise hearsay documents when they reflect the routine, systematic, and reliable practice of an enterprise. As long as the proponent carefully satisfies each foundational requirement and rebuts any signs of untrustworthiness, Philippine courts routinely admit such records as competent proof of the truth of their contents.

Disclaimer: This content is not legal advice and may involve AI assistance. Information may be inaccurate.

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